Global IT spends to rise to $1.25 trillion by 2017: Report

IT spends in Europe, the Middle East and Africa will grow by 1.9% in 2017 to $1.25 trillion from the previous year. However, IT spending across all the constituent regions of these areas will be almost flat in 2016, increasing by 0.6% year on year, according to a recent Gartner report.

Across all the countries of Europe, Middle East and Africa, spending on devices is expected to decline and to be the main contributor to an overall slowdown in IT spending in 2016. The segments that will contribute most to overall IT spending growth in 2017 are software and IT services, the report said.

IT services, for instance, will see a 4.1% growth in 2017 from a 3.8% growth expected in 2016. While software spending will grow by 6.8% in 2017 from 6% growth in spends in 2016.

Spending on data center systems, particularly servers, would normally grow when spending on software increases, but with the growing adoption of software as a service (SaaS) and other cloud offerings, data center spending will be more muted than usual, it added.

"Spending on digitalisation is on the rise in EMEA, and we’ll witness some leading organizations modernize their core IT systems and increase spend on software and services in particular, as part of their digital transformation,” said John-David Lovelock, research vice president at Gartner.

The Brexit effect is expected to have a more pronounced impact in Western Europe where the decline of the pound sterling will cause for prices to rise for many IT products in the UK in 2016.

"When the prices of goods increase, consumers and businesses shift their buying patterns, and the simple reaction is to buy less well-featured products," said Lovelock. "But now that there are viable cloud offerings in the UK, organisations are also able to shift their spending into different areas — to buy computing as a service, instead of servers. These shifts will play out further in 2017.

"Banks in France and Germany have increased their spending on software and consulting in 2016 to attract, or at least be ready for, any banking activity shifting away from London," he added.

However, IT spending in Western Europe in constant US dollars is forecast to total $803.5 billion in 2017, a 1.6% increase from 2016. IT spending levels in Western Europe are likely to be essentially flat in 2016, with growth of 0.2% year over year.